Telkom rewarded shareholders with a sharply bigger dividend in its 2026 financial year after a balance sheet clean-up that nearly halved the group’s debt – though the payout boost came against a poor performance at BCX.

The group declared an ordinary dividend of 270c/share for the year ended 31 March 2026, up 65.7% on the prior year’s ordinary payout of 163c. The increase was underpinned by a revised dividend policy that lifts the payout band to 40-60% of free cash flow, from 30-40% previously. Telkom declared this year’s dividend at 45% of free cash flow, or R1 38-billion, leaving itself room to pay out more in future years.

Interest-bearing debt fell to R6.59-billion at year-end, from R11.62-billion a year earlier, after Telkom used proceeds from the sale of its Swiftnet masts-and-towers business to repay borrowings. Net debt to Ebitda eased to 0.5x, from 0.6x, and free cash flow rose 10.4% to R3.07-billion. The deleveraging – rather than the underlying operating performance – is what gave the board headroom to raise the payout.

Group revenue edged up 1.4% to R44.48-billion, with data revenue climbing 7.6% to R26.6-billion and now accounting for 59.8% of the total, up from 56.4% a year earlier. Group Ebitda – earnings before interest, tax, depreciation and amortisation – rose 5.8% on a comparable basis to R12.48-billion, lifting the margin to 28.1%. Headline earnings per share from continuing operations increased 21.5% to 708.5c.

The standout remained Telkom’s mobile business, which passed 25 million subscribers and grew mobile service revenue 6.8% – what the company said was its 14th consecutive quarter of market-leading growth. Mobile data subscribers jumped 31.1% to almost 20 million, and the Telkom Consumer segment lifted adjusted Ebitda to R6.73-billion from R5-57-billion. Wholesale unit Openserve, meanwhile, recorded its first full-year revenue growth in nine years, up 2.3%, with its Ebitda margin improving to 33.5%.

Laggard

BCX was the clear laggard. External revenue at the enterprise IT division slipped to R10.31-billion from R11.28-billion, while its adjusted segment Ebitda fell almost 22% to R1.08-billion, leaving the margin at 9.4%. Cybersecurity revenue grew 21.1% and IT hardware and software revenue rose 5.6%, but that was not enough to offset declines in the division’s legacy fixed-line voice and data lines.

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Group CEO Serame Taukobong said the results validated Telkom’s data-led strategy and its OneTelkom operating approach. The group would keep capital expenditure intensity within a 12-15% range in the coming year, he said, balancing growth investment against cost discipline to protect margins and free cash flow. – © 2026 NewsCentral Media